Trust Fund Recovery Penalty Relief
Trust Funds are monies held on behalf of someone else to be paid to the Internal Revenue Service. These funds are deemed owned by another individual and entrusted to the business or individual to pay on an individual’s behalf to the IRS. The most common trust fund penalties are unpaid business employee taxes. Taxes withheld from employee’s paycheck along with the business due portion are payable to the IRS almost immediately.
Unfortunately, trust fund penalties are the highest penalty possible. They immediately incur a 100% penalty on the amount owed with interest on both principle and penalty assessing daily. The best way to resolve a Trust Fund Recovery Penalty is to avoid having it assessed at all. However, the longer your tax problem goes unresolved, the greater the chances that the IRS will look to whoever they determine to be responsible for the company’s failure to pay back taxes.
The person the IRS deems responsible may be an officer of the corporation, a partner in an LLC or partnership, or anyone who signs the payroll reporting forms. All may be personally liable for trust fund principle, penalties, and interest.
If the IRS has assessed you personally, then the IRS will begin taking enforcement against your personal assets, wages, and bank accounts. Sandra King Financial Services will try to obtain a release of your wage garnishment or bank levy and we’ll try to negotiate manageable terms whereby your business is able to resolve its own liability on a schedule acceptable by all. The IRS wants to work with your company to resolve this issue, although, it does want to make sure you understand the severity of the issue. Trust Fund principle, interest, and penalties are NOT dismissible by Federal Bank Rupcy as other tax liabilities are.